Friday, January 16, 2009

News: Credit card use declining on VISA and MasterCard

Today, I have an interview for new job. Within 30 minutes I get to go. And I rapidly search on the internet for the news for you, my blog reader. I saw that US people tend to use less in credit card for eliminate their credit card debt. And This is news from CNN Money below.

NEW YORK -(Dow Jones)- The U.S.'s largest banks reported a sharp decline in credit card spending last quarter, sending shivers through investors in credit card companies Friday.

Bank of America Corp. (BAC) and Citigroup Inc. (C) both on Friday reported credit card spending down sharply compared to a year earlier; BofA reported spending down 17.2% and and Citigroup reported spending down 15%. JPMorgan Chase & Co. (JPM) on Thursday reported spending down 8% year over year.

Credit card spending data "was far worse than we expected," KeyBanc analyst Anurag Rana said in downgrading Visa Inc. (V), MasterCard Inc. (MA) and Heartland Payment Systems Inc. (HPY) to neutral from buy.

Visa shares declined 7.8% to $45.51 in recent trading, MasterCard shares declined 5.1% to $123.65 and Heartland Payment shares declined 4.3% to $15.68.

UBS AG analyst Jason Kupferberg also warned Visa and MasterCard shares were likely to be volatile following the earnings reports of the big banks.

But Kupferberg said investors should bear in mind that Visa and MasterCards are more than just U.S. credit card companies, and that U.S. credit card volumes likely fell off more dramatically during the fourth quarter than in the rest of the world.

Still, KeyBanc's Rana said MasterCard and Visa were still tied strongly enough to the U.S. economy that the decline in credit spending justified his concern - he estimated that about 60% of Visa's payments volume was in the U.S. during its 2008 fiscal year. Meanwhile, he said that about 41% of MasterCard's volume came from the U.S. in 2008 fiscal year.

MasterCard is scheduled to report its fourth-quarter results, and Visa is scheduled to report results for its fiscal first quarter in early February.

Because this is the short news but you can see the original at CNN money

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